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The world is phasing out oil, and major historical oil exporters like Saudi Arabia, Iraq, Russia or Venezuela are facing an uncertain future. Will they survive a new era of clean energy, or will their economies collapse into poverty? Let’s find out!
These are the top 10 oil exporters in 2022. What will the future hold for them in 2040?
5. United Arab Emirates – $47.9 Bn oil exports
The United Arab Emirates are aware that their dependence on oil will be a problem in the medium term if they fail to diversify its economy, and they have been working to solve this problem for years. Whereas in 1980 oil sales accounted for up to 60% of Dubai’s economy, today they are just around 16%.
The Emirates have managed to diversify its economy, to the point that 26% of their GDP comes from wholesale and retail trade, 10% from banking, and 9% from manufacturing. Also, tourism continues to grow thanks to the heavy investment that has been made in Dubai: an architecturally avant-garde city with a world-class airport that is set to lead Eurasia’s air transport in the coming decades.
Emirates’ future, then, promises to be bright.
4. United States – $50.3 Bn oil exports
The United States is the fourth largest oil exporter in the world, and the number 1 oil producer. Although it is not as dependent on oil exports as other countries, oil accounts for 8% of US GDP. The percentage is not too high, but the massive size of the U.S. economy means that this 8% is equivalent to about 10.3 million jobs.
Despite this, the US has a clear future while phasing out oil. Since it is not only the world’s leading oil producer, but also the world’s leading oil consumer, the United States has the privilege of determining the pace of its consumption – and production – of oil. The rise of companies like Tesla, the world’s largest manufacturer of electric vehicles, further allows the U.S. to ensure a smooth transition from gas to electric cars. This would guarantee a gradual shutdown of oil wells and the relocation of its employees to new, sustainable industries.
3. Iraq – $50.8 Bn oil exports
Oil rents account for up to 42% of Iraq’s GDP, a country that mobilizes 50 billion dollars a year in oil exports and ranks as the world’s third largest oil exporter – even surpassing the United States.
Oil seems to have been a real curse for Iraq, since all the money it has procured for the country has not been reinvested in establishing a solid democratic regime or diversifying its economy. This is really sad, especially considering that Iraq has an extraordinarily rich history and a really vibrant society.
Investing in tourism, technology and renewable energy could make Iraq a major power in the Middle East, but Iraq’s ethnic instability and the country’s poor international image are weighing down an economic transition that seems increasingly urgent.
For now, Iraq does not look like it will have a good future when its oil rents run out.
2. Russia – $72.6 Bn oil exports
Oil exports were equivalent to 9.2% of Russia’s GDP in 2019, while hydrocarbon exports were close to 40% if we also include gas. Adding to this the secondary jobs derived from this high volume of exports, more than 50% of Russian GDP depends directly or indirectly on the export of hydrocarbons, which, as of today, are increasingly being hit by powerful international sanctions in response to Russia’s invasion of Ukraine.
With no clear investment programs in technology, tourism, transportation or renewable energies, and with a financial sector increasingly devastated by sanctions, Russia is the only country on our list that is not only unprepared for a world without oil, but is hurtling headlong towards the destruction of its economy even before that. Increasingly isolated internationally and with a mentality more reminiscent of 1940 than 2040, Russia has a truly bleak future ahead, regardless of the outcome of the war it decided to launch in February 2022.
1. Saudi Arabia – $113.7 Bn oil exports
The world’s leading oil exporter continues to be Saudi Arabia, the country that for decades has led oil production globally. The Arab country’s huge oil reserves, and a conservative but stable government centered around its royal family, have made Saudi Arabia the most decisive country in the oil industry for the past 50 years.
Today, oil exports account for 24% of Saudi Arabia’s GDP, which rises to 50% if gas exports are added. Considering the huge volume of oil that Saudi Arabia moves – more than $113.7 billion dollars in exports annually – the royal family will have to work hard to accelerate its country’s energy and economic transitions.
Luckily, Saudi Arabia has a key resource to try to overcome the oil collapse: Mecca. Being the capital of the Muslim world means very substantial revenues around the Hajj, but this alone is not enough to compensate for the loss of the world’s largest volume of oil exports. And although Saudi Prince Mohammed Bin Salman has avant-garde ideas for his country – such as the construction of a spectacular futuristic city called ‘The Line’ –, the truth is that more will be needed to reverse what could be a major economic blow to Saudi Arabia in the medium term.